More disturbing is the interest only loans folks are taking. As the market cools and interest rates rise, living paycheck to paycheck is going to get tougher and tougher.
I like the advice of another poster - have one home you can fall back in if need be.
Better yet, live below your means.
It would be a tough call, if you were out of work and had used up your savings - refinance your home and try to tide yourself over until you could pay the bills, or run up your credit cards.